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The main contract of the Container Shipping Index (European line) fell 4.00% during the day and is now at 1950.6 points.On June 20, Morgan Stanley published a report stating that the Hong Kong residential market has fallen for seven consecutive years, and house prices have fallen nearly 30% from the historical high in August 2021 (first hit in July 2018). Although it may still be in the early stages, the bank is optimistic that it may be at the beginning of an upward cycle and may last for 4 to 5 years. The reasons include that Centaline CCL has lagged behind the Hang Seng Index and may catch up; wage growth will help affordability return to the level of 2010; structural benefits such as low land supply and the abolition of additional stamp duty; low interest rates. It is also expected that house prices will rise by 2% in the second half of the year. In terms of stock selection, the bank prefers Sun Hung Kai Properties (00016.HK), Henderson Land Development (00012.HK) and Kerry Properties (00683.HK) because they are the main beneficiaries of the reduction in Hong Kong interbank offered rates and have ample saleable resources. Among them, the rating of Henderson Land Development was upgraded from "in line with the market" to "overweight", but the rating of Sino Group (00083.HK) was downgraded from "overweight" to "in line with the market".The South Korean won rose 1% against the dollar during the day.The UKs seasonally adjusted retail sales month-on-month rate in May was -2.7%, the biggest drop since December 2023.Germanys PPI month-on-month rate in May was -0.2%, in line with expectations of -0.3% and the previous value of -0.60%.

USD / CAD Price Analysis: As US Inflation decelerates, the recovery move to approximately 1.3700 appears vulnerable

Daniel Rogers

Mar 15, 2023 11:45

 USD:CAD.png

 

After declining to approximately 1.3650, the USD / CAD pair has made a less certain rebound move. A deceleration in U.S. inflation suggests a further decline in demand for safe-haven assets in the aftermath of the Silicon Valley Bank (SVB) failure, putting the Loonie asset in jeopardy near 1.3700.

 

According to CNBC, Moody's Investors Service has lowered its prognosis on the entire banking system from stable to negative, causing S&P500 futures to decline in the early Asian session. The situation reveals a minor pessimism in the general risk-taking disposition.

 

As US inflation continues to decline, the Federal Reserve (Fed) will likely continue to raise interest rates at a slowing rate. Inflation in the United States is falling in accordance with expectations, so Fed Chairman Jerome Powell should not hurry to tighten monetary policy further.

 

USD / CAD has recovered after detecting a cushion close to the horizontal support derived from the March 1 high at 1.3659 on a two-hour scale. The dearth of conviction and fortitude in the US Dollar's recovery increases the likelihood of further asset losses.

 

The 20-period Exponential Moving Average (EMA) at 1.3710 may continue to act as a barrier for the US Dollar.

 

In the interim, the Relative Strength Index (RSI) (14) has protected the decline into the bearish 20.00 to 40.00 range. However, the negative bias is still evident.

 

A conclusive breach of the low of March 14 at 1.3652 would push the currency toward the low of March 07 at 1.3600, then the low of March 03 at 1.3555.

 

In an alternative scenario, a confident recovery above the high of March 14 at 1.3750 would propel the major toward the highs of March 13 above 1.3800 and March 09 at 1.3835.


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